The central government wants to take about one-third of the reserve currency lying with the Reserve Bank.
The tension between the Reserve Bank and the Central Government continues. While the Central Government can meet its important agenda in the RBI board meeting on November 19, the Reserve Bank can work on reducing the governor’s role in the board. In fact, according to the news, the central reason for the dispute between the central government and the Reserve Bank governor is the amount of 9.6 trillion rupees (9.6 lakh crore) rupees held by Central Reserve Bank.
Modi government demand 3.6 lakh crore from RBI
The Indian Express has quoted sources saying that the central government wants to take about one-third of the reserve currency lying with the Reserve Bank. The central government has the stance that keeping the reserve currency in such a large quantity is the old and compressed notion of the Reserve Bank and it needs to be changed. According to the news, the central government wants the Reserve Bank to give it 3.6 trillion rupees from this reserve currency. The Central Government wants to strengthen the economy through the expenditure on communication debt and other development works.
The IMF has advised the Modi government to relinquish RBI.
At the same time, on the demand of the central government, the Reserve Bank believes that this can cause huge loss to the country’s economy. With this argument, the Central Reserve Bank is opposing the Central Government for giving money to its reserve treasury.
Pointing to the sources, it has been said that the central government has the right to help the government banks by bringing the 3.6 trillion rupees from the Reserve Fund into the market. Significantly, with this money government bank will be able to distribute new business loans and strengthen their earnings. The Central Government is also saying that on one hand, where the government bank is recovering its immoveable debt, with the help of Reserve Money it can stand back firmly.
Increased conflicts between the Reserve bank and the government can resuscit, Urjit Patel
On the other hand, the Reserve Bank believes that it is not appropriate to spend the reserve currency. This expenditure will not increase in earnings and this expenditure will be left only as a government expenditure. According to the RBI, this step is also not appropriate for the financial market as it threatens to reduce market confidence.
It is noteworthy that in the year 2017-18, the Reserve Bank had given Rs 50,000 crore of rupees to the Central Government from its reserve. It includes an interim amount of 10,000 crores. Earlier, in the year 2016-17, it had given Rs 30,659 crore to the Central Government.
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